The steepest contraction was seen in the production of steel (48.4 per cent), cement (22.2 per cent), and refinery products (21.3 per cent).
Core industries’ output in India shrank by 23.4 per cent in the month of May 2020, however, the contraction was narrow in comparison to that in April. Earlier in the month of April, the core industries’ output had fallen fell by 37 per cent due to a strict nationwide lockdown. The steepest contraction was seen in the production of steel (48.4 per cent), cement (22.2 per cent), refinery products (21.3 per cent), natural gas (16.8 per cent), electricity (15.6 per cent), coal (14 per cent), and crude oil (7.1 per cent), according to the Department for Promotion of Industry and Internal Trade (DPIIT). However, the production of fertilisers rose 7.5 per cent in May.
The eight core industries comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP), hence it also indicates the pace of industrial activity after the government partially lifted the lockdown in the month of May. After an 18.3 per cent contraction in the March’s IIP, the government did not release April’s IIP, citing insufficient data. However, the strict lockdown and the worrisome picture of core industries’ output reveal the status of industrial production as well.
Given a severe fall in the steel output, Steel Minister Dharmendra Pradhan today said in a webinar that the steel industry plays a fundamental role in the economic development of a nation. He also raised a concern that India has become the second-largest steel producer in the world and has the capacity to build quality products, but per-capita consumption of steel is almost one-third of the global average.
Meanwhile, the government received Rs 45,498 crore up to May 2020, which is 2.03 per cent of the corresponding BE 2020-21 of total receipts. It comprises Rs 33,850 crore tax revenue, Rs 10,817 crore of non-tax revenue, and Rs 831 crore of non-debt capital receipts. In the same duration, the total expenditure incurred by the government stood at Rs 5,11,841 crore, which is 16.82 per cent of corresponding BE 2020-21).